(You can watch my SPC14 session “The Tipping Point Between On-premises and Cloud” by scrolling down)
Without a clear Roadmap, Microsoft leaves door and imaginations open for future of SharePoint and the Cloud
SPC 2014 is in the books. The keynote was vague, leaving many with the impression that Microsoft is planning on abandoning SharePoint on-premises customers after its 2015 release. And although I do think they were “testing the waters” to see how many would run to Office 365, SharePoint on-prem will remain dominant for the foreseeable future.
I assisted Microsoft in running the new Executive Track (great idea, by the way) which was well received by IT leadership. Total attendance at SPC was about 8,000 with 20% or 1500 CTOs and IT Directors. My candid conversations with hundreds of IT leaders serve as the basis of this blog and I hope someone in Microsoft leadership reads this or pays heed to Mark Gilbert at Gartner. We share many of the same opinions on Microsoft and SharePoint.
During my first session, “Tipping Point Between On-Premises and Cloud”, I had 400 attendees. The crowd was engaged and feedback was excellent. You can watch the entire session here:
Here are some important highlights I gleamed from the attendees:
- Audience mix: 75% IT leaders, 15% managers, 10% IT Pro,
- 90% are on-prem with SharePoint
- 70% of those cannot move from on-prem to Office365 due to sensitive data, customizations or compliance/regulation
At the end of the session, during Q&A, the very first question asked concerned my impression of Jeff Teper’s keynote eluding that Office 365 would get all the SharePoint updates first, and SharePoint on-premises (red-headed stepchild) would get a mere subset of updates and feature releases.
This would be fine if Jeff had gone on to clarify that most of the paying SharePoint customers are on-premises and many are unable to move to the Cloud. And more importantly, that Microsoft has a roadmap for SharePoint on-prem. But instead we got nothing. Crickets. As a result, most left the keynote in bewilderment. This includes end customers and partners. Nice job, Microsoft. Bill Clinton’s keynote was okay, but he spoke to the audience as if we were all Microsoft employees. Others who heard him speak before said he was off his game.
We spoke to 1,000+ consultants, businesses, ISVs and SIs at the Fpweb.net booth in the exhibitor hall.
The conversations were excellent. The SharePoint ecosystem is mature and folks understand how Fpweb.net Managed SharePoint Services helps them save time and money… We take care of SharePoint wherever it lives. And yes, a big part of that conversation is allowing on-prem customers to focus on using SharePoint strategically, not on keeping it running.
The best part of the week was my involvement as a facilitator in the Executive Track Roundtables. The idea was to have IT leaders share wins and concerns. Real world conversations. No spin please. I had questions teed up regarding Microsoft roadmap, Cloud strategy, etc… I ran three, one hour sessions. Interestingly enough, Microsoft embedded an Office 365 PSE in one conversation and an Office 365 developer in another to answer questions and take notes.
My first group of 10, all IT leaders. From small to large enterprise. Here are the highlights:
- 20% are moving everyone to Office 365 this year
- 80% are using or will use hybrid this year to test Office 365 and Azure
- 30% large (massive) accounts left the table frustrated with Microsoft’s lack of on-prem roadmap and the embedded Microsoft Office 365 rep unable to speak to it.
The second group of 12 was comprised almost entirely of ISVs, SIs and service providers. They were confused by the keynote and recent cuts to Office 365 commissions. Most questions revolved around how they would make money working with Microsoft. And some were looking at diversifying with other vendors.
Here are some highlights:
- 75% didn’t understand how Microsoft would help them grow
- 33% are looking at diversifying through Box, Google, Salesforce and AWS
Here is a fact of about humans. When you give them too little information they assume the worst and make up information. By not cementing at the keynote a roadmap for on-prem SharePoint, partners and customers are going home and will fill in the gaps with their worst case scenario, best guess. And I heard from many that this now includes a look at Box, Google or Salesforce.
I’ll step in here to speak from a CEO’s perspective to those of you with SharePoint on-prem about Microsoft the business, who is measured by revenue, and why Microsoft will NOT abandon SharePoint on-prem customers in the next five years.
The reality is that although Microsoft Office 365 sales are getting traction, it does not mean it is being widely used.
In other words, some O365 are being given away at EA renewal to increase “perceived adoption.” Don’t get me wrong, I do think Office 365 will take off in 2015-2016, but it is not ready right now. Both Gartner and Fpweb.net see and acknowledge it. Fpweb.net is onboarding a lot of ex-Office 365 customers who are hitting SharePoint limitations that they were not aware of. Fortunately for Microsoft, Fpweb.net is able to keep them in the family. Usually you only get one crack at going Cloud with a customer.
Gartner also recognizes that Office 365 is not ready. Exchange Online is just now getting encryption for data at rest. SharePoint Online is missing many functions, and Lync Online is unstable at times. I anticipate Microsoft getting it right in 2016.
Microsoft success is measured by revenue. They are top 4 IT gross profit (~70%) company.
Microsoft’s cash cows are connected at the hip: Windows and Office. Windows dominated desktops for decades and Office grew out of that domination. Windows is quickly losing relevance on the desktop. Windows 8 is a miss (tablet OS okay, everything else poor) and most won’t leave Windows 7. Apple devices dominate the tablet world and Google is now eating up the mobile market. Where is Office for the iPad? I fully expected this to be the big announcement at SPC. And as Windows suffers, so does Office.
Enterprise Agreements are keeping the lights on for Microsoft. They cannot afford to jeopardize their renewal. So the SharePoint on-premises customer has the leverage in this relationship. As a CEO, other than having folks familiar with Windows and Office, what new things are Microsoft offering that will help your company either save or make money?
Nadella will need to move quickly to reorganize Microsoft and start to truly innovate. Until then, SharePoint on-prem will remain the dominant paid user base of SharePoint and Microsoft should acknowledge this group and provide a roadmap for their success. Until then, Fpweb.net and Gartner both agree there will be two SharePoint products for you to manage – Office 365 and SharePoint on-premises.